George Kamel - Average Net Worth By Age (How Do You Stack Up?)

Starting point is 00:00:05 I've talked a lot on this channel about what your net worth should be by a certain age, but not about what it actually is, the reality of it all. We haven't done a proper deep dive into what the real net worth numbers look like across the country. So today, you're going to get the scoop on how your net worth compares to your neighbor, your parents, your brother's Gen X prepper friend Eric, who always comes to Thanksgiving, everybody. Plus, I'm going to share my secret that keeps your net worth going up as the years roll on. But before we get started, anybody remember this guy here? Yeah, roughly 96,000 of you.

Starting point is 00:00:35 who watch this video should remember. And if you can't remember what my net worth is, I'm going to have to ask you to hit that like and subscribe button, out of respect for all my butterfly bros. I don't even want to know what that means. To start, let's do a quick recap on what net worth is and why it's important. Your net worth is what you own minus what you owe. Assets minus liabilities. It has nothing to do with your income. It's simply the total value of your assets, things you own, like your house, cars, your investments, cash, your extensive collection of Harry Potter, Funko Pops, etc., etc. Minusus, your life. Minus your liabilities, aka debt, credit card debt, student loans, car loans, your mortgage, that kind of thing.

Starting point is 00:01:10 Now, for example, let's say in assets you have a home valued at $210,000, a 401k with 60 grand in it, a car worth $15,000, a savings account balance of $7,000, a checking account balance of $2,000. While you add it all up, you've got $294,000 in total assets. Pretty pretty good. But on the flip side, let's say you also have credit card debt totaling $12,000, student loan debt to the tune of 35 grand, a mortgage balance of 175 grand, a car loan of $10,000, medical bills of $1,000, well, all of that adds up to $233,000 in liabilities. Now, the final step is to subtract your liabilities from your assets, which would bring

Starting point is 00:01:50 your total net worth to $61,000. Now, the reason we're going through these mathematical gymnastics is because I want you to see the importance of knowing your net worth. Your net worth gives you clarity on where you are financially, and that way you know what you need to do to get to where you want to go. It is the best scoreboard for where you are financially, not your stupid credit score or the land rover that you drive. If you've never calculated your net worth before, I'll drop a link below to a handy little calculator you can use to figure it out real quick. Okay, recap over. For the rest of you who have been keeping up with your net worth,

Starting point is 00:02:20 you might have noticed your number to a little hop and a skip and a jump over the last few years. In fact, the Federal Reserve found that between 2019 and 2022, the median net worth of Americans surge 37%. And this is across all different types of families, socioeconomic statuses, and demographics. Just a fun fact. In that same study, the Fed also looked at net worth by age, which is what we're talking about today.

Starting point is 00:02:43 Now, two things I want to point out before we look at the numbers. Number one, the reason age is the main factor here is because net worth tends to grow with age as people move up in their careers and accumulate more assets like a home or investments. And then, of course, there are phases of life, like during retirement or when you're raising four teenage boys, where wealth decumulates.

Starting point is 00:03:01 God bless the grocery bills for the parents out there. Number two, the numbers we're looking at today don't actually represent the average net worth of certain age brackets. We're looking at the median, which is actually a much more accurate picture. And if you don't believe me, go find a fourth grader to explain it to you.

Starting point is 00:03:16 Here's my fourth grade explanation. Averages include the crazy high numbers and the crazy low numbers, which can skew your results, while the median is simply the number right in the middle of the data if it were listed from smallest to largest. Got it? Good.

Starting point is 00:03:29 We're going to start with the median net worth for those who can still attend young adult potlucks the local abiding faith Lutheran Church, aka people under 35 years old. As of 2022, the median net worth of Americans under 35 was $39,000. If that feels low, it's because it is low. Now, obviously, not a very high number, but think about it. This is the time where you're at the earlier stages of your career, if you're in your 20s or early 30s, and you're likely still paying for student loans or other dumb decisions you made before your prefrontal cortex was fully formed. I know the lip tat sounded like a good idea compared to the lower back tat, but both still fall under the category of dumb.

Starting point is 00:04:07 No regrets. You have no regrets? Dad. No? Like not even a single letter. All right, moving on. For people between the ages of 35 and 44, which is where I'm at, the median net worth is a little over $135,000.

Starting point is 00:04:19 Better? Or getting somewhere. And think about this one. A fair amount of these people are entering the throes of raising a family during this time frame. But despite the crazy cost of childcare and Boy Scout popcorn fundraisers, this is the time to prioritize saving and investing so that compound interest still has decades ahead of you to work its magic. Side note, if any scouts are watching this, hook me up with some of that white cheddar cheese corn ASAP. SOS. Okay, next up, people begrudgingly purchasing their first readers at Walgreens, those ages 45 to 54.

Starting point is 00:04:49 Their median net worth is a little over $247,000. All right, I'm feeling a little better about. about this. Not great, mind you, but better. We're talking a quarter million dollars in their net worth. 250K sounds like a lot of money, but that also includes their home equity, everything in their retirement accounts, the cash, the cars, you name it. Still not doing great. And I think one of the reasons here is lifestyle creep. This is a big trap that people fall into in this stage of life. Now, I don't know if it's a midlife crisis thing or what, but it seems like every guy waxing a new fishing boat in a suburban driveway falls into this age range, right? Anyone driving a Mazda Miata

Starting point is 00:05:23 is in this age range. evidence, but evidence nonetheless. What's up with the Miata? Such a tiny, even for a little guy. I'm like, I can't, I'm not going in that thing. All right, before we look at the next age range, a friendly reminder about the importance of cyber safety. Now, I know that might seem kind of random,

Starting point is 00:05:38 but you know what else is random? Those calls and texts you get from spammers and scammers who found your personal info on the web. And that's why I use Delete Me to keep my private data private. Delete Me is an online service that can find and remove your info from hundreds of these sketchy data broker websites, and they send you a full report detailing what they delete from where. And I got my report right here. They have saved me 44 hours of time it would have taken me to find and remove that stuff myself. And right now you can get 20% off any of their plans for being a George Camel fan by going to join deleteme.com slash George or clicking the link in the description.

Starting point is 00:06:11 Another random PSA I'd like to share is that if you're stowing your emergency fund in a regular savings account, come here. What are you doing? Don't be regular. Regular sucks. Put it in a high yield savings account like the one offered by Laurel Road, one of the sponsors of today's episode. That's where you're your money can earn 4.8% APY with no bogus maintenance fees, no minimum balance, and FDIC insured deposits. So if you want to get your savings working harder for you, go to Laurelroad.com slash George to learn more or click the link in the description. All right, back to it. We're not getting any younger here. For ages 55 to age of 64, the median net worth was almost $365,000. Now you'll notice we're making some progress, not as much as we'd like to see. These people are at the beginning of the end. And by the end, I mean the home stretch until retirement, okay? Not time to go riding on that long black train with Josh Turner just yet. Don't you die on me? Don't you die on me?

Starting point is 00:07:03 For this age bracket, the window to build wealth isn't gone by any means, but it is shrinking, as are the people ages 55 to 64 years old. Now, at this point, your financial journey, I would love for you to have a paid-for house and be maxing out your retirement accounts every single year with catch-up contributions, which doesn't look like most people are doing, judging by the median net worth. Let's get to it, people. All right, moving along for people ages 65 to 74, the median net worth is about $410,000.

Starting point is 00:07:32 Now, again, if you think about people in this age range, they're pretty much retired at this point, with not much to show for it, because a lot of that money's probably tied up in the equity of their home, some of it is in retirement, but not enough to retire with dignity. This is scary.

Starting point is 00:07:45 And if you've been paying close attention, you may have noticed the growth between this age bracket and the last one was a lot less than it had been previously, which makes sense considering a lot of people are now drawing from their retirement savings, which is making this number not increase at the same pace. And speaking of retirement, last but not least, the median net worth of people 75 and older is about $335,000. Which proves my point. We are decumulating at this point, not accumulating.

Starting point is 00:08:10 The net worth number went down a good bit, and I'd be willing to bet it's because they underestimated the cost of living and especially the cost of health care expenses. They are needing to pull a lot of money out of these retirement accounts in order to just stay afloating. In fact, it's estimated that a couple retiring at 65 will need roughly $338,000 in savings just to have a good chance of covering health care costs during retirement. And remember, it's not just health care you got to pay for, it's food, utilities, and birthday money for your grandkids. Love you, Teta.

Starting point is 00:08:38 Aww! Okay, sadly, there are no more numbers on the list, because 75 and older is where that long black train stops at the station. But let's focus on where your net worth stands and what you should do with this information while you're alive. I'm not dead. For starters, if your net worth is higher than the median, that's great and all, but don't celebrate quite yet. Don't get too comfortable.

Starting point is 00:08:58 Because the way I look at it, average here is kind of the suck bar. Even if you're a little above the median, it's not going to guarantee your net worth will be enough for you to get through retirement and leave a legacy. On the flip side, if your net worth is lower than the median that you heard, regardless of how old you are, you don't need to freak out. All right, in fact, once I found a plan for my money that actually worked for me, it only took me 10 years to go from negative net worth to net worth millionaire. All right, here's how it worked. At 23, I had $40,000 in student loan debt and credit card debt. I had a negative net worth. I started to get out of that debt using the Ramsey plan, using the baby steps, and in 18 months,

Starting point is 00:09:32 I was completely debt-free. About six months later, I got my fully funded emergency fund of three to six months of expenses. Then I started saving up for a home, bought a home, invested 15% of my income into my company, Roth 401K, got the home paid off, invested more, and all of that over the course of a few years, led me to a net worth of over a million dollars, which is. far and above the medians you heard today. So while it helps to know your net worth and where you stand, don't obsess over it.

Starting point is 00:09:58 Instead, focus on doing the right things with money, and you'll be just fine. Plus, if you're watching this channel and following the plan that I teach, your net worth is naturally going to go up over time. It's going to take some hard work and sacrifice, but it will be worth it, and the momentum you build will be incredible. So let me know in the comments where your net worth stands compared to your age bracket and how you feel about it.

Starting point is 00:10:17 I love a good check-in. And be sure to keep watching this next video to find out why your net worth explodes once you reach $100,000. And by explodes, I mean like, kaboom. As always, thanks for watching. We'll see you next time.

George Kamel - Average Net Worth By Age (How Do You Stack Up?)

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